Market Moment
Glen Eagle®: America’s Women-Owned Trading Desk®
01/25/2021
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Tech Earnings in Focus: So far 87.9% of all of the firms that have reported earnings have beaten Wall Street estimates (far above the long-term average of 65%). However, this week will prove to be the biggest test to the earnings season as nearly a quarter of the S&P500 companies are scheduled to report (representing close to 40% of the index’s market value). In particular, companies such as Microsoft and Apple will be scrutinized, as the tech sector’s expected profit growth for 2021 is currently 14%, which is below other sectors such as financials, industrials, and materials.
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More Uncertainty for Oil Companies: President Joe Biden acted quickly to fulfill campaign promises when he canceled the Keystone XL oil pipeline and mandated that only top officials of the Interior Department could approve new drilling activities. This week he is expected to go further and officially suspend the sale of all oil and gas leases on federal land, which is responsible for 10% of the US supply and 24% of the country’s carbon dioxide emissions (if you also include coal extraction). The one silver lining for oil investors? Crude oil prices may rise in response to the restriction in supply.
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East Asia Attracts Foreign Investments: In 2020 one third of all foreign investment went to east Asian economies. In particular China saw a 4% increase in outside investment while India saw a 13% increase. These data points lay in stark contrast to the US and EU which saw a 49% and 71% drop, respectively. While the total value of foreign investment into the US remains much larger than any other nation it has decreased every year since 2017.
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Savings Lead to Optimism: The amount of money in Americans’ Bank accounts grew by close to $3 trillion during 2020 thanks to the quarantine (i.e. limited opportunity to spend) and the stimulus checks. As a result, the household savings rate has doubled and if it were to return to pre-covid levels consumer spending would increase by around 6%. Some question whether Americans will go out and spend this extra cushion of savings as the economy opens up given the higher level of unemployment, but if they do many analysts worry higher inflation may become a reality.
Economic Calendar
Monday: Chicago Fed National Activity Index (Dec), Dallas Fed Manufacturing Activity Index (Jan)
Tuesday: Consumer confidence index, Home price index (Year over year)
Wednesday: FOMC Meeting announcement, Jerome Powell Press conference
Thursday: Gross domestic product, New home sales, Leading economic indicators
Friday: Personal income, Consumer spending, Core inflation, Consumer sentiment index
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US Futures
S&P 3847.25 +0.34%
DOW 30,923 +0.05%
NASDAQ 13,489.00 +0.95%
World Markets
FTSE 6670.60 -0.37%
NIKKEI 28,882.29 +0.67%
Hang Seng 30,159
+2.41%
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Treasuries
3 Mo 0.08%
10YR 1.09%
30 YR 1.85%
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Currencies
Euro $1.215
Pound $1.369
Yen $103.81
Commodities
Gold 1862.6 +0.34%
WTI Crude 52.80 +1.01%
Silver 25.77
+0.84%
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Upcoming Earnings Calls
Monday - KMB
Tuesday - RTX, JNJ, MSFT, GE, SBUX, LMT
Wednesday - BA, ABTFB, AAPL, TSLA, T
Thursday - MCD, CMCSA, SHW, AAL, LUV, JBLU, MA, V, MDLX, LLY
Friday - CL, CVX, LLY, CAT,
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Consider working with Glen Eagle as one of your preferred partner trading desks
Client Focused Trading for large institutions, pensions, hedge funds, wealthy families, and private equity for over 30 years
Ansie Monaghan
Carol Ann Fernandez
Glen Eagle
4422C Route 27
PO Box 399
Kingston, NJ 08528
(609) 631-8231
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